A recent report by the US-based think tank Brookings, authored by Surjit Bhalla and Karan Bhasin, marks a significant milestone for India: the official elimination of ‘extreme poverty.’ This achievement is attributed to the strong policy emphasis on redistribution by Prime Minister Narendra Modi’s government. The report highlights key findings, including a notable decline in the headcount poverty ratio and a substantial increase in household consumption, indicating robust inclusive growth fueled by government policies.
According to the report, official consumption expenditure data for 2022-23 reveals a consistent real per capita consumption growth of 2.9% annually since 2011-12. Rural areas have experienced even higher growth at 3.1%, outpacing urban growth at 2.6%. This data, the first official survey-based poverty estimates for India in over a decade, underscores the effectiveness of government-funded programs aimed at redistribution.
The report underscores the role of policies targeting redistribution in rural areas, contributing to higher consumption growth. Additionally, there has been a significant reduction in both urban and rural inequality, which, combined with robust growth, has led to the elimination of poverty in India, according to Brookings’ analysis using the Purchasing Power Parity USD 1.9 poverty line.
Notably, the report highlights discrepancies between poverty estimates by the World Bank and those presented in the Brookings report, which do not include factors such as government-provided free food and access to public health and education services.
Brookings credits various government initiatives, including the national mission for toilet construction and efforts to ensure universal access to essential services like electricity, cooking fuel, and piped water, for driving consumption growth. The substantial increase in rural access to piped water, from 16.8% in August 2019 to 74.7% presently, has notably improved public health outcomes.
The report concludes on an optimistic note, stating that India’s official confirmation of extreme poverty elimination has positive implications for global poverty rates. This achievement underscores the effectiveness of government policies and signals a significant milestone in India’s socioeconomic progress.
